RED ALERT

Britain's long-term defense equipment program faces a multibillion-dollar shortfall, with combat aircraft acquisition and upgrade funding needs projected to double in the middle of the critical period.

Projections for the Defense Ministry's next 10-year plan, from 2011-21, reveal a serious gap between available funding and anticipated program costs. Defense Ministry figures seen by Aviation Week & Space Technology indicate the "program excess" is estimated to be 11.6 billion pounds ($21.4 billion) over the period in question. The Defense Procurement Agency's present budget is about 6 billion pounds a year.

The so-called Equipment Program 07 (EP07) period also includes a hike in fixed-wing aircraft expenditure. According to the ministry's own figures, beginning in 2014-15, there's a sharp increase in funding, including for the Joint Combat Aircraft (JCA), as the U.K. refers to the Lockheed Martin F-35. This is estimated to cost 10 billion pounds. The purchase of a third tranche of the Eurofighter Typhoon would also fall mainly in this period. Tranches 1 and 2 of the four-nation program are already under contract. The British Tranche 2 for 89 aircraft cost 4.3 billion pounds; Tranche 3 for an additional 88 aircraft will also be in this order. BAE Systems is the U.K. industrial lead on the program.

"We are in the very early stages of embarking on the EP07 planning round," says one Defense Ministry official. However, he declined to comment on the content of "leaked" documents.

BAE Systems Chief Executive Mike Turner is uncertain about the fate of Tranche 3. Whether the partner nations "have the money will be based on two things," he says. "One is the commitment of European governments to defense. . . . Secondly, there are already strong demands on the defense procurement budgets in European nations, including the U.K." (see p. 49).

In addition to substantial expenditure on air platforms during EP07, there are large naval and land system acquisitions planned. These include two 65,000-ton-class aircraft carriers at a cost of 3.5-4 billion pounds and the 6-billion-pound Type 45 air defense destroyer for the Navy as well as the 14-billion-pound Future Rapid Effects System family of armored vehicles for the Army. EP07 also covers the development and entry into service of one of the two types of warships now expected to meet the Navy's Future Surface Combatant program. There's also a marked increase in guided-weapons spending in the middle of this period. The first element of the Selective Precision Effect at Range (Spear) program is due to enter service in 2013-14, while procurement of the Meteor rocket-ramjet air-to-air missile will be underway. The missile has a 2012 in-service date. Directed-energy weapons will also feature terms of research and development and procurement costs in this period, although a capability will be fielded before EP07.

British defense industry executives are concerned as to both long- and short-term funding problems. "Programs are all over the place," says one. At the beginning of July, the ministry said it planned to merge the Defense Procurement Agency and the Defense Logistics Organization with the aim of improving acquisition and support. A further aim will be to control and rein in costs. Within industry, however, there's concern that, given the problems with EP07, one or more major acquisition programs may have to be cut. Another industry executive says there's already considerable debate within the ministry as to whether to reduce procurement numbers, stretch the length of procurement programs, or both, to try to reduce the gap between available funding and the equipment program.

Alongside funding the JCA, and considering the introduction of unmanned combat air vehicles in the 2015-20 period, funding within the EP07 is also intended to "sustain an effective air capability beyond 2010" using so-called legacy platforms--the Tornado GR4 and the Typhoon. This is designed to provide a "meaningful" strike capability with both platforms from the next decade and beyond. The Royal Air Force is aiming to be able to deploy the Tranche 1 Typhoon with the capability to use the Litening III laser designator pod, and the Raytheon Enhanced Paveway II laser-guided bomb from July 2008.

For planning purposes, the Tornado GR4 has an out-of-service date of 2025, with the Typhoon to follow in 2033. Some industry and defense ministry sources suggest the Tornado could remain in service until around 2030, with the Typhoon's life also extended.

The RAF is now assessing "projected capability shortfalls" for both these aircraft, and looking to develop a technology insertion program to fill perceived gaps. Both aircraft may be fitted with active electronically scanned array (AESA) radar. The ministry's Advanced Radar Targeting System demonstrator program will examine replacing the Tornado's 1970s-generation radar with an AESA. The air force aspiration is to begin upgrading its GR4 fleet before 2010. A similar program is envisioned for Typhoon around the 2017 timeframe.